Hey there, Alex here from Dynamite Jobs.
Today, the guys (Dan and Ian) did a 45-minute livestream where they discussed a variety of topics. The key takeaway of the conversation that jumped out at me was ”How long might it take an entrepreneur to become wealthy?” This post is a summary of that main takeaway.
If you’d like to hear more details on this, check out the full video of the discussion below. Please let us know what you think and what other topics you’d like the guys to cover! Check out their livestreams here.
If you’re thinking about entrepreneurship (or deep in this timeline already), this information is a light guide to the general timeline for building wealth.
When does an entrepreneur become wealthy? If an entrepreneur can follow the path without too much diversion, potentially within ten years of starting. This generalized path to wealth for bootstrapping entrepreneurs is straight forward but it’s not the same for everyone. There are caveats whether or not this will work and four different stages in the timeline.
The General Timeline:
Stage 1: ‘Exit Velocity’
Stage 2: 1000 Days
Stage 3: 2000 Days
Stage 4: 10 Years
Stage 1: ‘Exit Velocity’
Before an entrepreneur sets off building their business, it is estimated that 2-4 years are needed to gain proper ‘Exit Velocity’ (EV). EV is the know-how of the skills you need and the industry you’re entering. It’s also the network you’ve built and the connections you made. These components give you the EV to make the entrepreneurial leap. Many entrepreneurs fail because they don’t enter with the correct EV.
Exit Velocity can be imagined with the analogy of a long jump. A long jump is powerful because of the running start. This running gives the long jumper momentum to fly forward. EV is the momentum to help you fly forward. With the know-how, connections, and resources, you’ll have the EV to launch forward and start your venture.
Stage 1: 1000 Days
About 3 years (or 1000 days) into starting your business, the income stream from this venture should be large enough to replace what you were previously earning in your job. The first 1000 days are broken down well in this post, The 1000 Day Rule: What Living the Dream Really Looks Like.
Stage 2: 2000 Days
After 5-6 years (or 2000 days) your venture becomes a ‘wealth-generating enterprise’. It may also have become a ‘financial platform’ for you. The business will be sustainable with its own capital and may even have enough capital to try more risky projects.
Stage 3: 3000 Days
10 years later (or 3000 days), you may now be considered ‘wealthy’. Meaning, you are financially dependent and may even be able to retire early. Your business is now a substantial asset that can be leveraged in many ways. Most likely there are interested in buyers eyeing what you have built. This point in the timeline is also known as the ‘10 Year Career’.
Here are some common reasons for missing the stages in the timelines:
- Not able to contribute enough time and resources
- There are constraints from debt
- You have a good job (so why leave it?)
- A ‘Personal Limiting Factor’ (PLF), such as ego
- You are distracted by ‘Shiny Object Syndrome’
How do you even know if you should commit to 10 years of something?
There are two heuristics that blend well together and will help you decide if this is the path for you. They are the 5-Hour Rule and the 5-Year Plan.
The 5-Hour Rule
Find a skill or industry or something you can dive into and study for 5 hours a day. You should be able to dive into this every day for at least 5 years.
The 5-Year Plan
Is this skill, project, or passion you’ve found worth doing for five years straight? If not, it may not be worth doing at all. This thought exercise goes beyond business ventures. It can be used for where you should live, diets, and even who you choose as a partner. If you start down a path, you should be able to sustain this path for 5 years.
Here’s the full conversation on the timeline:
Also Mentioned in the Video
The 1000 Day Rule: What Living the Dream Really Looks Like
I Want to Make Money from Anywhere on the Planet – How Do I Get Started?
The Cult of Early Retirement Meets (or Strangely, Doesn’t Meet) the Cult of Entrepreneurship
Five Approaches to Getting Rich
Projects We’re Working
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